Avoid These Mistakes in Estate Planning!

Estate Planning Mistakes You Can and Should Avoid

1. Don’t Lose Your Estate Plan!

If we cannot find your original Last Will and Testament, the court will presume that you destroyed it because you changed your mind. Make sure that someone you trust will be able to access your estate plan if you were to suddenly pass.

2. Your Revocable Trust Does Not Protect Your Estate From Lawsuits or Debts.

If you want to have asset protection or Medicaid planning, that is not provided by your irrevocable trust nor by your Will. You will want to talk to us about an Irrevocable Trust.

3. Don’t Appoint Trustees Who Are Crazy, or Unreliable, Procrastinators, or Bankrupt.

The Trustee of your trust or the Personal Representative of your estate will have access to the money and assets that you leave behind. Be very careful to appoint people who are completely reliable to hold these tasks. You already know that there are family members who can never be trusted. Often these people have been in trouble before, have filed bankruptcy because they refuse to live on what they earn, still can’t live on a budget, and do not have any savings. Do not feel like you must give everyone a title or a job in your estate plan. Just choose the best person and let them handle the job. If there is no one in the family you can trust, talk to your estate planning attorney for suggestions.

4. Remember to Put Your “Stuff” in the Trust

Your trust only controls what it owns. If you did not deed your house into the trust, it is still part of your probate estate. If you do not put your bank accounts into the trust, those are also a part of your probate estate. Many people create beautiful trust documents but fail to change the ownership of those assets thereby causing their estate to incur thousands of dollars of unnecessary expenses.

5. Update Your Trust When Things Change

Review your estate plan regularly, and do it again whenever anything important changes. If your child becomes seriously ill, review your trust and call your attorney. If you are diagnosed with a serious illness, call your attorney. If an heir or beneficiary files bankruptcy, call your attorney. If your daughter marries a deadbeat, call your attorney.

6. Always include a backup plan.

Life takes unexpected turns. We expect that our children will all survive, be in good relationships, stay out of trouble, and have families of their own. But that doesn’t always happen, so your estate plan should have contingency plans in it. I suggest that each gift should have two backup plans. For example “I leave everything to my spouse, if she survives me by at least 30 days; but if she does not survive to my son, John Doe so long as he survives, but if he does not then survive me to the Oklahoma Chapter of the ASPCA.” This concept applies to your other plans as well: appoint a backup person to hold your Power of Attorney, your Medical Power of Attorney, and so forth.

7. Be sure to have a Will, even if you have a Trust.

My client “Amy” was terribly ill when she inherited a piece of property from an uncle in another state. In fact, Amy lived only a few days after her family learned of the inheritance. Her children told me that they had never met Amy’s uncle, and were amazed to learn of the inheritance. Amy never had a chance to deed that property into her trust during her lifetime, but because she had a will that named the trust as the beneficiary, we were able to get the property into the trust through the probate court. On the other hand, I have a case in my office where the deceased gentleman had a trust, but he had no will and he did not deed his home into the trust. The outcome is not likely to be even remotely similar to what this gentleman ever dreamed would happen.

If you need assistance with your estate planning, we can help. Call 405-733-8686 for an appointment or to come to an estate planning workshop.